The world of offshore opportunities for India-related business is undergoing a transformation that may set tried and tested relationships adrift, writes John Church
It used to be that when you mentioned India and offshore investment in the same sentence companies and lawyers would inevitably think of Mauritius, Cyprus and later, Singapore. Today, big changes are afoot as longstanding bilateral agreements are re-examined and the push for greater transparency and accountability grips the offshore sector.
Most of India’s cross-border business is driven by double taxation avoidance agreements (DTAAs), and that’s why Mauritius has thrived – it has a particularly good one with respect to capital gains and withholding taxes, among other elements.
Legally, historically and even culturally, with its large section of population of Indian descent, Mauritius has held the best cards at the offshore poker table. “It’s not a voluminous industry, and India is not the next ‘China’ for offshore. We [other jurisdictions] just can’t compete with Mauritius,” admits one offshore professional.